Title

Management Contract for Town Water Supply

Parties

Town Water Supply and Sewerage Authority (the “Authority”) and a private operator

Date

N/A

Duration

3 years, subject to a review every 12 months

Service being provided

Sole and exclusive provision of operation and maintenance services for water supply within Town Water Supply Area (clause 6.1)

Investment obligations

The operator shall be responsible for the repairs and extensions to the water supply system and for the efficient implementation of any development plan but the cost of these will be reimbursed (clause 6.3).  (Under the performance contract the Authority is obliged to pay Government of Uganda contributions to the capital costs of the assets)

Funding source

Tariffs – the Authority is obliged to pay the Operator its fees as well as any approved investments and repair costs.  It is not clear from this contract or the performance contract what happens if the sums in the Escrow Account are insufficient to meet these payments. (10.4)

Maintenance and rehabilitation requirements

Clause 10.1 Operator to manage repairs and replacements to the system including damage to the system.  Also responsible for initiating and managing extensions to distribution system.  Operator to be reimbursed cost of approved repairs and replacements.  For approved extensions, Authority will advance payment to Operator (10.3) and 10.6). 

Fourth schedule sets out maintenance and rehabilitation requirements

Service levels specified

Applicable Laws + Fourth Schedule – these are reasonably simple but clear – covering availability, service coverage, quality of treated water (set at reasonable levels), pressure of water supplies, continuity of service, maintenance and repairs, prevention of pollution and customer service.

Minister has the right to amend standards set out in 4^th Schedule of the Performance Contract (which corresponds to the 4^th Schedule of the Management Contract), in consultation with the Water Policy Committee.  It is not clear, however, if the Operator would have any protection if the standards were changed in such a way that it would be difficult for the Operator to meet them or would result in an extra cost to the Operator as there is no change of law provision in the contract

Performance targets

Percentage of billing enquiries acknowledged within 7 working days; Percentage of billing enquiries dealt with within 14 working days; Percentage of complaints acknowledged within 7 days; Percentage of complaints dealt within 14 days. (Fourth Schedule, 2.1)

Coverage targets (see new connections below)

New connections

Within 12 months of the date of this Contract, the Operator shall ensure that the number of people not connected to the Water Supply and living more than 250 metres from the nearest standpipe is reduced by 20% and by 20% for each successive year until the entire population in the Area lives no more than 250 metres from the nearest standpipe. (Fourth Schedule, 1.2)

Bonus/penalty system

Where the Operator fails to fulfill the continuity of service standards (Fourth Schedule), for reasons other than those outside its control, or fails to submit a business plan in accordance with clause 14, Operator shall, at the discretion of the Authority, forfeit a portion of the Base Fee, on the basis of the number of hours of discontinued service. (12.2)

Tariff setting - who responsible

The Authority shall have the right to set the tariffs giving consideration to any proposals submitted by the Operator, and subject to the provisions of the Performance Contract. (18.1 and 18.2)  Authority to give due consideration to any proposals submitted by Operator in its business plans.

Tariff collection

Operator on the behalf of the Authority (11.0) and monies shall be paid into the Escrow Account (which is jointly controlled by Operator and Sub-County Chief). (7.7)

Payment - does provider keep revenues/get paid fee

Operator pays all revenues to the Escrow Account.  Authority pays Operator a Management Fee duly computed (in accordance with second schedule)(12.1). The Authority shall remit to the Operator the amount demanded by the Operator and certified by the Authority, out of the Joint Account. (Second Schedule)

Accounts and reporting

Operator to keep proper and adequate records (13.1) + keep records listed in 5^th Schedule + monthly, quarterly reporting and annual financial statements (15)

Within one month of commencement date, to prepare a 3 year business plan, to be reviewed and updated on an annual basis (14)

Proposals for capital expenditure and renewal

To be included in business plan (14.6).  Any extensions and renewals are to be approved by Authority

Asset ownership

Authority

Is any sum put aside for rehabilitation?

No – all revenues are paid into Escrow Account – to the extent that there are excess sums then this could be put towards repairs and extensions

Regulator/monitoring body?

Minister of Lands, Water and Environment

Right to cut off water supply

Not specified in the contract

Dispute resolution

Arbitration by arbitrator to be appointed by agreement of parties or failing agreement, by Director of Directorate of Water Development (25.0)

Customer complaints mechanism

No express provision in the contract